Favorite Paper from 2014 AEAs
Last weekend, I was at the AEA meetings in Philadelphia. Despite the snow and freezing cold, I discussed a paper and went to a number of great sessions on a variety of different topics. It was nice to see old friends and colleagues too.
One question that came up in a couple of sessions was whether institutions or beliefs on Wall Street helped drive the housing bubble. In the institutions camp is the idea that fund managers had little downside and therefore took excessive risks. On the beliefs side is the notion that fund managers actually drank the kool-aid and truly believed that the housing market was appropriately valued. A fantastic paper on the topic that has stuck with me is a paper by Cheng, Raina, and Xiong on the capital gains on the homes that managers in securitization firms saw on their own homes during the time period. What they show is that people in these industries saw greater housing portfolio losses than a control group. This suggests that they really did believe that the housing market was in good shape leading up to the crash! Based on these conclusions, the authors recommend models of institutions also incorporating beliefs. Neat, huh?
Here is the paper http://www.aeaweb.org/aea/2014conference/program/retrieve.php?pdfid=586
I just finished a new draft of the paper "Housing and Labor Markets in Growing vs Declining Cities" today. This paper looks at how growing and declining cities react when subjected to demand shocks.
This paper explores nature of regional supply responses to demand shocks. Results imply that demand-driven models are appropriate in growing or stable cities, and models with supply constraints are more appropriate in declining cities. Cities are found to exhibit dramatically different housing and labor market dynamics in response to local demand shocks, consistent with the hypothesis that the durable nature of the housing stock acts as a supply constraint in declining cities. Failure to apply the correct class of models to a particular city will result in biased estimates of employment, house prices, and wage effects of ordinary demand shocks or demand-side stimulus policies.
Data for the Export Price Index and the Urban Decline Index can be found here.
Presentation at 2013 NARSC conference
On Saturday, Nov. 16, from 8-10am, I will be chairing a session on environmental issues in urban and regional economies at the NARSC conference in Atlanta. I'll be presenting the paper with Tony Yezer on The Energy Implications of City Size and Density. This paper examines the energy implications of increased urbanization using a numerical urban simulation of an open city. We ask the question, ``do two cities of one million consume more or less energy than one city of two million," and find that, perhaps surprisingly, energy implications are about the same either way. However, under a height limit or certain other zoning restrictions, larger cities are actually much less energy efficient than smaller cities.
Other papers in the session include Economic Analysis of the Impact of Carbon Tax on Economy of Makassar City, Indonesia; Input-output analysis of CO2 emissions embodied in international trade and the analysis of geopolinomic structure implications; The most cost-effective path of energy system transition under the abatement objective in the time horizon to 2050: the case of China; and Solar Energy Access and Complex Urban Cores Three-Dimensional Morphology: A Spatial Statistical Approach.
Given my vast amounts of free time due to the shutdown of the federal government, I decided to give my website a facelift to a HTML5/CSS design. I took a template at 1stwebdesigner and heavily edited it to tailor it to what I wanted. I first did web design in the late 1990s in high school, and things actually haven't changed that much on the coding end. On the other hand, HTML 5 has a whole new set of features which I hope to implement sometime in the future. One that's included in this reboot is a responsive design depending on the size of the window. So, if you're looking from a phone or tablet, it will look different than if it is viewed on a computer monitor. Nifty, huh?